With its choking traffic and pollution, little public investment, and no coordinated planning, Mexico City seems an unlikely model for urban development. Yet this sprawling hub of 18.5 million people is home to some of the world's most innovative architecture.

It's precisely the challenges of building within such a congested city that have spawned a new model for architecture firms, as documented in an exhibition in New York, "Mexico City Dialogues: New Architectural Practices," at the Center for Architecture until May 7.

The show's models, photographs, and diagrams highlight recent projects by 12 young architects in Mexico City who are literally breaking new ground in a largely unregulated environment that encourages risk-taking. Due to a lack of private and public commissions, this new generation of architecture-school graduates has become developers themselves.

"I'm from Mexico City and I'm very aware young architects had to invent for themselves a different kind of practice," says Enrique Norten, the well-known architect (now based in New York) who proposed the show. "They become their own clients and take their own risks."

José Castillo, curator of the show, calls this modus operandi "expanded practice." In more affluent countries, architects focus on aesthetic refinements such as clerestories and cornices. In Mexico, they work with bricks and mortar, acquiring sites, brokering deals, and navigating the bureaucracy.

Prominent New York architect Bernard Tschumi, former dean of Columbia University's School of Architecture, recently returned from a trip to Mexico City, where he was amazed at the unusual opportunities enjoyed by neophytes. "In New York, to be a young architect is to be 50 years old," Mr. Tschumi explains. "In Mexico City, I was seeing a lot of work done literally by people in their mid-20s, barely out of school."

The reason for such opportunities, Tschumi speculates, is that Mexico isn't bound up by inflexible rules and regulations. He compares this Wild West spirit to the situation in California 20 years ago.

"We in New York were amazed at the incredible freedom Los Angeles architects had," he recalls. "Because of the climate, things could be much lighter and building codes were less constraining, which gives more freedom to experiment."

Strict oversight can hogtie US architects, notes Rick Bell, director of the Center for Architecture. "Our more litigious culture and [regulatory] agencies imbued with a sense of fiduciary and public trust mean [that] those who commission architecture aren't willing to take chances," he says.

The result can be "cookie-cutter solutions and a lot of repetition in terms of the same firms getting the same types of commissions and using the same materials," says Mr. Bell.

At least 100 upstart firms are following this model of "market urbanism" in Mexico City, according to Javier Sánchez, an architect-developer included in the show. When Sánchez graduated from architecture school in 1996, Mexico was in economic crisis and building commissions were scarce.

His firm, Higuera + Sánchez, undertook the initiative to buy a dilapidated warehouse in the Condesa, a neighborhood in transition to a trendy, alternative-lifestyle area. He gutted the interior and created studio lofts - a type of housing that didn't exist in the city - for young professionals, singles, and couples without children. Mr. Sánchez negotiated with banks to convince lenders that these units should be eligible for mortgages. (At the time, new apartments were only two-bedroom units and mortgages available only to traditional, two-income families with children.)

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